Richard Laverty, New Zealand Trade and Enterprise's regional director for Europe, Middle East and Africa, shares his insight on business opportunities in the Middle East following his recent visit to the region.
MIDDLE EAST: As other economies choke on the global credit crisis, the Middle East is swallowing hard but still moving optimistically ahead.
To be fair, its stock-markets have taken a hit and the rapid pace of real estate development may be consolidating, but on a recent (September 2008) trip it was clear that the momentum remains strong.
There is a good reason for this. The people bank-rolling this vision have not walked away. They are as committed as ever to creating a modern urban infrastructure, providing a high standard of social services for their people, and creating a diversified and sustainable economy.
In estimating the United Arab Emirates’ budget break-even price for oil at a lowly US$23 per barrel, the IMF provides us a sobering reminder of the wealth that this part of the world has at its disposal to invest in reforms, infrastructure and its populations.
New Zealand companies and local consultants are reporting robust sales opportunities and steady streams of RFP’s for service work. Local development agencies such as Dubai Internet City (hosts for the New Zealand Trade and Enterprise Dubai Beachhead programme) retain an expansionary mindset.
Contrary to the situation in other markets at present, the Middle East is still very open for business. In this context one of New Zealand Trade and Enterprise’s (NZTE) top priorities in this region is the area of services, particularly education and consulting.
New Zealand merchandise exports to the six Gulf Cooperation Council (GCC) states are currently worth US$917 million annually to the New Zealand economy, with Saudi Arabia and the United Arab Emirates representing the largest individual markets.
The official statistics omit service oriented exports and therefore underestimate how important this region is for education and consulting services.
NZTE has been focused on identifying high value business opportunities in the corporate, industry and government (CIG) sectors, and is working with New Zealand education and service providers to maximise these opportunities.
New Zealand education consulting companies have definitely gained traction in this market. Cognition Consulting is working alongside government agencies in Qatar and the United Arab Emirates to upskill teachers and implement a programme of school self management. A consortium of four New Zealand universities is also leading the modernisation of the university system in Oman; and Bahrain has just opened a new polytechnic with the assistance of Polytechnics International New Zealand (PINZ).
NZTE is now looking at how it can apply the education model for success to other areas of consultancy. Key areas of New Zealand consultancy expertise include public sector reform, transportation, tourism and hospitality, and NZTE is investigating how this intellectual property may be commercialised in the Middle East.
In the Middle East, people are very open to Kiwis because New Zealand is perceived as non-threatening and politically neutral. On top of this Kiwis are known for their pragmatism and ability to develop and provide solutions that work. Our “can do” attitude and reputation for delivery in the absence of arrogance is a big advantage.
As well as education and services, NZTE is also focused on information and communications technology (ICT), specialised manufacturing, and food and beverage.
At the end of my trip as I was flying back to Hamburg with Emirates, I was thrilled to see single serve Cowells Pavlovas on the menu. Growing up in Dunedin, I remember this Kiwi icon well. To me, this sums up the Middle East at present - the vision is grand, but you can make a commitment to be part of it and you may well see, as Cognition and Cowells have done, that in the Middle East everything is still possible.
For more information, contact Richard Laverty, regional director for Europe, Middle East and Africa, NZTE, Hamburg.
In the Middle East region, NZTE operates offices in Dubai and Riyadh.